Good News or Bad?.... YES!

Consumer Borrowing in U.S. Falls Record $7.9 Billion
an. 8 (Bloomberg) -- Consumer borrowing dropped by a record $7.9 billion in November as Americans scrambled to boost savings in face of the deepening recession and amid an investor exodus from securities backed by credit-card and other loans.

The slump brought consumer credit down to $2.57 trillion, and capped the first back-to-back monthly decline since 1992, the Federal Reserve said today in Washington. The biggest decrease came in securitized assets, an area where Fed policy makers are creating a new $200 billion lending program to shore up credit.

Today’s figures foreshadow a prolonged drop in consumer spending as households try to reduce debt with their net worth declining and job losses accelerating, analysts said.

“Consumers have clammed up,” said Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio, who forecast a decline. “The reduction in consumer credit doesn’t stop here, and will spill over into 2009. Households are bolstering their balance sheets.”

The Fed’s figures don’t cover borrowing secured by real estate. In October, credit fell by $2.8 billion, previously reported as a drop of $3.5 billion.

Economists had forecast credit would be little changed, according to the median of 28 estimates in a survey conducted by Bloomberg News. Projections ranged from a gain of $6.9 billion to a decline of $5 billion.

Total consumer borrowing fell at a 3.7 percent annual rate in November, the biggest percentage decline since January 1998, the Fed said today. The decline in dollar terms was the biggest since records began in 1943.

Revolving debt such as credit cards decreased by $2.8 billion. Non-revolving debt, including auto loans, dropped $5.2 billion for the month.

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Agree ! Yes Of course

This builds up "pent up demand".
I need a new car, but I'll keep the old one till I see how this shakes out.
I need new carpet but I'll wait till I see how this all works out.
Eventually, when the psychology changes...
But this is what I heard today:

President-elect Barack Obama plans to warn Americans that without bold action on the economy, "a bad situation could become dramatically worse. ...

I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible. If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future.

Hmmm.
I think I'll save my money and drive the old clunker.

Edited by Rogerdodger, 09 January 2009 - 01:20 AM.

I need a new wife but will hold off until things shake out

Recession Driving Piggy Bank Sales

Reuters is reporting that piggy banks are flying off store shelves.
"We have been selling coin banks really well," said Laura Kellner at Kikkerland Design Inc. in New York City, whose stylish chrome pig is priced at $31.

*** ***

Retailers said this translated neatly into a gift that captured the spirit of the times.

"We definitely noticed a trend with the piggy banks," said Erin Mara at Homebody, a design store in the Capitol Hill neighborhood of Washington, DC.

"People were very upfront about the need to save...the pig is very symbolic of that sentiment," she said.


http://www.shoppingb...pl?sblog=101093